In Re Max Shoop ISSUE

FACTS WON under the New York rule as it exists the principle of
comity is established.

- Max Shoop is applying for admission to practice law in the HELD

Philippines under Par. 4 of the Rules for the Examination of
Candidates for Admission to the Practice of Law. It was - The Philippines is an UNORGANIZED TERRITORY of the US,
shown in his application that he was practicing for more under a civil gov't. established by the Congress.
than 5 years in the highest court of the State of New York.
- In interpreting and applying the bulk of the written laws of
this jurisdiction, and in rendering its decisions in cases NOT
- The said rule requires that: covered by the letter of the written law, this court relies
New York State by comity confers the privilege of admission upon the theories and precedents of Anglo-American
without examination under similar circumstances to cases, subject to the limited exception of those instances
attorneys admitted to practice in the Philippine Islands. where the remnants of the Spanish written law present well-
(Aside from comity, the satisfactory affidavits of applicants defined civil law theories and of the few cases where such
must show they have practiced at least 5 years in any precedents are inconsistent with local customs and
(district or circuit or highest) court of the US or territory of it. institutions.
But admission is still in the discretion of the court.)
- The jurisprudence of this jurisdiction is based upon the ECL
- The rule of New York court, on the other hand, permits in its present day form of Anglo-American Common Law to
admission without examination in the discretion of the an almost exclusive extent.
Appellate Division in several cases:
- New York permits conferring privileges on attorneys
admitted to practice in the Phils. similar to those privileges
1. Provided that the applicant also practiced 5 years as a
accorded by the rule of this court.
member of the bar in the highest law court in any other
state or territory of the American Union or in the District of
- Petition granted. Decision is based on the interpretation of
Columbia
the NY rule; doesn’t establish a precedent with respect to
2. The applicant practiced 5 years in another country future applications.
whose jurisprudence is based on the principles of the
English Common Law (ECL). Reasoning

On TERRITORY:
a. Comity would exist if we are a territory of the US
b. We are NOT an organized territory incorporated into the ii. New York uses the phrase "based on the English
United States but Common Law" in a general sense
c. We are NOT a "foreign country" or "another country" iii. And that such Common Law may become the
either basis of the jurisprudence of the courts where practical
d. Like Puerto Rico, we may not be incorporated but we are considerations and the effect of sovereignty gives round for
a territory since the US Congress legislates for us and we such a decision.
have been granted a form of territorial government, so to iv. If in the Philippines, ECL principles as embodied in
that extent we are a territory according to the US Atty. Gen. Anglo-American jurisprudence are used and applied by
e. It is not believed that the New York court intended the the courts to the extent that Common Law principles are
word "territory" to be limited to the technical meaning of NOT in conflict with the LOCAL WRITTEN laws, customs, and
organized territory or it would have used the more accurate institutions as modified by the change of sovereignty and
expression. subsequent legislation, and there is NO OTHER FOREIGN
f. Therefore, We have a basis of comity to satisfy the first case law system used to any substantial extent, THEN it is
requirement since the full phraseology indicates a proper to say in the sense of the New York rule that the
SWEEPING INTENTION to include ALL of the territory of the US. "jurisprudence" of the Philippines is based on the ECL.

On COMMON LAW jurisdiction:

(On what principle/s is the present day jurisprudence Angara v. Electoral Commission
based?) G.R. No. L-45081 July 15 1936
g. In most of the States, including New York, codification
and statute law have come to be a very large proportion FACTS:
of the law of the jurisdiction, the remaining proportion Jose Angara and Pedro Ynsua, Miguel Castillo and Dionisio
being a system of case law which has its roots, to a large Mayor were candidates voted for the position of member
but not exclusive degree, in the old English cases. of the National Assembly for the 1st district of Tayabas
h. In speaking of a jurisprudence "based on the English province.
Common Law" it would seem proper to say that the On Oct 17 1935, the provincial board of canvassers
jurisprudence of a particular jurisdiction Is based upon the proclaimed Angara as member-elect of the Nat'l Assembly
principles of that Common Law if its statute law and its case for garnering the most number of votes. He then took his
law to a very large extent includes the science and oath of office on Nov 15th. On Dec 3rd, Nat'l Assembly
application of law as laid down by the old English cases, as passed Res. No 8 which declared with finality the victory of
perpetuated and modified by the American cases. Angara. On Dec 8, Ynsua filed before the Electoral
i. Common Law adopted by decision: Commission a motion of protest against the election of
i. In the US, the ECL is blended with American Angara, that he be declared elected member of the Nat'l
codification and remnants of the Spanish and French Civil Assembly. Electoral Commission passed a resolution in Dec
Codes. There a legal metamorphosis has occurred similar to 9th as the last day for the filing of the protests against the
that which is transpiring in this jurisdiction today. election, returns and qualifications of the members of the
National Assembly. On Dec 20, Angara filed before the SERRANO V. GALLANT MARITIME SERVICES,INC.
Elec. Commission a motion to dismiss the protest that the
protest in question was filed out of the prescribed period. By way of Petition for Review under Rule 45 of the Rules of
The Elec. Commission denied Angara's petition. Court, petitioner assails the Decision and Resolution of the
Angara prayed for the issuance of writ of prohibition to Court of Appeals (CA).
restrain and prohibit the Electoral Commission taking further
cognizance of Ynsua's protest. He contended that the
Constitution confers exclusive jurisdiction upon the said
Electoral Commissions as regards the merits of contested FACTS:
elections to the Nat'l Assembly and the Supreme Court
therefore has no jurisdiction to hear the case. Petitioner was hired by Gallant Maritime Services, Inc. and
Marlow Navigation Co., Ltd. (respondents) under a
ISSUE: Philippine Overseas Employment Administration (POEA)-
Whether or not the SC has jurisdiction over the Electoral approved Contract of Employment with the following terms
Commission and the subject matter of the controversy; and conditions:
Whether or not The Electoral Commission has acted without
or in excess of its jurisdiction.
Duration of contract 12 months
Position Chief Officer
RULING:
Basic monthly salary US$1,400.00
Hours of work 48.0 hours per week
In this case, the nature of the present controversy shows the
Overtime US$700.00 per month
necessity of a final constitutional arbiter to determine the
Vacation leave with pay 7.00 days per month
conflict of authority between two agencies created by the
Constitution. The court has jurisdiction over the Electoral
On March 19, 1998, the date of his departure, petitioner was
Commission and the subject matter of the present
constrained to accept a downgraded employment
controversy for the purpose of determining the character,
contract for the position of Second Officer with a monthly
scope and extent of the constitutional grant to the Electoral
salary of US$1,000.00, upon the assurance and
Commission as "the sole judge of all contests relating to the
representation of respondents that he would be made Chief
election, returns and qualifications of the members of the
Officer by the end of April 1998.
National Assembly." (Sec 4 Art. VI 1935 Constitution). It is
held, therefore, that the Electoral Commission was acting
Respondents did not deliver on their promise to make
within the legitimate exercise of its constitutional
petitioner Chief Officer. Hence, petitioner refused to stay on
prerogative in assuming to take cognizance of the election
as Second Officer and was repatriated to the Philippines on
protest filed by Ynsua.
May 26, 1998.
Petitioner’s employment contract was for a period of 12 petitioner’s “[b]asic salary, US$1,400.00/month +
months or from March 19, 1998 up to March 19, 1999, but at US$700.00/month, fixed overtime pay, + US$490.00/month,
the time of his repatriation on May 26, 1998, he had served vacation leave pay = US$2,590.00/compensation per
only two (2) months and seven (7) days of his contract, month.”
leaving an unexpired portion of nine (9) months and twenty-
three (23) days. Respondents appealed to the National Labor Relations
Commission (NLRC) to question the finding of the LA that
Petitioner filed with the Labor Arbiter (LA) a Complaint petitioner was illegally dismissed.
against respondents for constructive dismissal and for
payment of his money claims in the total amount of The NLRC modified the LA Decision and corrected the LA’s
US$26,442.73. computation of the lump-sum salary awarded to petitioner
by reducing the applicable salary rate from US$2,590.00 to
The LA rendered a Decision dated July 15, 1999, declaring US$1,400.00 because R.A. No. 8042 “does not provide for
the dismissal of petitioner illegal and awarding him the award of overtime pay, which should be proven to have
monetary benefits, to wit: been actually performed, and for vacation leave pay.
Petitioner filed a Motion for Partial Reconsideration, but this
WHEREFORE, premises considered, judgment is hereby time he questioned the constitutionality of the subject
rendered declaring that the dismissal of the complainant clause. The NLRC denied the motion.
(petitioner) by the respondents in the above-entitled case
was illegal and the respondents are hereby ordered to pay Petitioner filed a Petition for Certiorari with the CA,
the complainant [petitioner], jointly and severally, in reiterating the constitutional challenge against the subject
Philippine Currency, based on the rate of exchange clause. After initially dismissing the petition on a technicality,
prevailing at the time of payment, the amount of EIGHT the CA eventually gave due course to it, as directed by this
THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS (US Court in its Resolution which granted the petition for
$8,770.00), representing the complainant’s salary for three certiorari, filed by petitioner.
(3) months of the unexpired portion of the aforesaid
contract of employment. The CA affirmed the NLRC ruling on the reduction of the
The claims of the complainant for moral and exemplary applicable salary rate; however, the CA skirted the
damages are hereby DISMISSED for lack of merit. constitutional issue raised by petitioner.
In awarding petitioner a lump-sum salary of US$8,770.00,
the LA based his computation on the salary period of three His Motion for Reconsideration having been denied by the
months only — rather than the entire unexpired portion of CA, petitioner brings his cause to this Court on the following
nine months and 23 days of petitioner’s employment grounds:
contract – applying the subject clause. However, the LA The Court of Appeals and the labor tribunals have decided
applied the salary rate of US$2,590.00, consisting of the case in a way not in accord with applicable decision of
the Supreme Court involving similar issue of granting unto
the migrant worker back wages equal to the unexpired Impugning the constitutionality of the subject clause,
portion of his contract of employment instead of limiting it petitioner contends that, in addition to the US$4,200.00
to three (3) months. awarded by the NLRC and the CA, he is entitled to
US$21,182.23 more or a total of US$25,382.23, equivalent to
Even without considering the constitutional limitations [of] his salaries for the entire nine months and 23 days left of his
Sec. 10 of Republic Act No. 8042, the Court of Appeals employment contract, computed at the monthly rate of
gravely erred in law in excluding from petitioner’s award the US$2,590.00.31
overtime pay and vacation pay provided in his contract Arguments of the Petitioner
since under the contract they form part of his salary.
The Court now takes up the full merit of the petition mindful For Antonio Serrano (petitioner), a Filipino seafarer, the last
of the extreme importance of the constitutional question clause in the 5th paragraph of Section 10, Republic Act
raised therein. (R.A.) No. 8042, violates the OFWs’ constitutional rights in
that it impairs the terms of their contract, deprives them of
equal protection and denies them due process.
ISSUES: The Arguments of Respondents

 Whether Section 10 (par 5) of RA 8042 is unconstitutional Respondents contend that the constitutional issue should
 Proper computation of the Lump-sum salary to be not be entertained, for this was belatedly interposed by
awarded to petitioner by reason of his illegal dismissal petitioner in his appeal before the CA, and not at the
 Whether the overtime and leave pay should form part of earliest opportunity, which was when he filed an appeal
the salary basis in the computation of his monetary before the NLRC.40
award The Arguments of the Solicitor General

The Solicitor General (OSG)41 points out that as R.A. No.

The unanimous finding of the LA, NLRC and CA that the 8042 took effect on July 15, 1995, its provisions could not
dismissal of petitioner was illegal is not disputed. Likewise have impaired petitioner’s 1998 employment contract.
not disputed is the salary differential of US$45.00 awarded Rather, R.A. No. 8042 having preceded petitioner’s
to petitioner in all three fora. contract, the provisions thereof are deemed part of the
minimum terms of petitioner’s employment, especially on
Applying the subject clause, the NLRC and the CA the matter of money claims, as this was not stipulated upon
computed the lump-sum salary of petitioner at the monthly by the parties.
rate of US$1,400.00 covering the period of three months out
of the unexpired portion of nine months and 23 days of his
employment contract or a total of US$4,200.00.
The Court’s Ruling: discriminatory intent against, and an invidious impact on
OFWs
First Issue The subject clause does not state or imply any definitive
governmental purpose; and it is for that precise reason
that the clause violates not just petitioner’s right to equal
Does the subject clause violate Section 1, Article III of the protection, but also her right to substantive due process
Constitution, and Section 18, Article II and Section 3, Article under Section 1, Article III of the Constitution.
XIII on Labor as protected sector? Second Issue

The answer is in the affirmative. It is plain that prior to R.A. No. 8042, all OFWs, regardless of
contract periods or the unexpired portions thereof, were
Section 1, Article III of the Constitution guarantees: treated alike in terms of the computation of their monetary
No person shall be deprived of life, liberty, or property benefits in case of illegal dismissal. Their claims were
without due process of law nor shall any person be denied subjected to a uniform rule of computation: their basic
the equal protection of the law. salaries multiplied by the entire unexpired portion of their
Section 18, Article II and Section 3, Article XIII accord all employment contracts.
members of the labor sector, without distinction as to place The enactment of the subject clause in R.A. No. 8042
of deployment, full protection of their rights and welfare. introduced a differentiated rule of computation of the
To Filipino workers, the rights guaranteed under the money claims of illegally dismissed OFWs based on their
foregoing constitutional provisions translate to economic employment periods, in the process singling out one
security and parity: all monetary benefits should be equally category whose contracts have an unexpired portion of
enjoyed by workers of similar category, while all monetary one year or more and subjecting them to the peculiar
obligations should be borne by them in equal degree; none disadvantage of having their monetary awards limited to
should be denied the protection of the laws which is their salaries for 3 months or for the unexpired portion
enjoyed by, or spared the burden imposed on, others in like thereof, whichever is less, but all the while sparing the other
circumstances. category from such prejudice, simply because the latter’s
Imbued with the same sense of “obligation to afford unexpired contracts fall short of one year.
protection to labor,” the Court in the present case also Prior to R.A. No. 8042, a uniform system of computation of
employs the standard of strict judicial scrutiny, for it the monetary awards of illegally dismissed OFWs was in
perceives in the subject clause a suspect classification place. This uniform system was applicable even to local
prejudicial to OFWs. workers with fixed-term employment.
The subject clause does not state or imply any definitive
governmental purpose; and it is for that precise reason that
Upon cursory reading, the subject clause appears facially
the clause violates not just petitioner’s right to equal
neutral, for it applies to all OFWs. However, a closer
protection, but also her right to substantive due process
examination reveals that the subject clause has a
under Section 1, Article III of the Constitution.
The subject clause being unconstitutional, petitioner is nine months and 23 days computed at the rate of
entitled to his salaries for the entire unexpired period of nine US$1,400.00 per month.
months and 23 days of his employment contract, pursuant
to law and jurisprudence prior to the enactment of R.A. No. SAMEER OVERSEAS PLACEMENT AGENCY vs. CABILES
8042.
Parties:
Third Issue
SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioners.
JOY C. CABILES, Respondent.
Petitioner contends that his overtime and leave pay should
form part of the salary basis in the computation of his
FACTS:
monetary award, because these are fixed benefits that
have been stipulated into his contract.
Petitioner, Sameer Overseas Placement Agency, Inc., is
Petitioner is mistaken.
a recruitment and placement agency.
The word salaries in Section 10(5) does not include overtime
and leave pay. For seafarers like petitioner, DOLE Respondent Joy Cabiles was hired thus signed a one-year
Department Order No. 33, series 1996, provides a Standard employment contractfor a monthly salary of NT$15,360.00.
Employment Contract of Seafarers, in which salary is Joy was deployed to work for Taiwan Wacoal, Co. Ltd.
understood as the basic wage, exclusive of overtime, leave (Wacoal) on June 26, 1997. She alleged that in her
pay and other bonuses; whereas overtime pay is employment contract, she agreed to work as quality
compensation for all work “performed” in excess of the control for one year. In Taiwan, she was asked to work as a
regular eight hours, and holiday pay is compensation for cutter.
any work “performed” on designated rest days and
holidays. Sameer claims that on July 14, 1997, a certain Mr. Huwang
In the same vein, the claim for the day’s leave pay for the from Wacoal informed Joy, without prior notice, that she
unexpired portion of the contract is unwarranted since the was terminated and that “she should immediately report to
same is given during the actual service of the seamen. their office to get her salary and passport.” She was asked
WHEREFORE, the Court GRANTS the Petition. The subject to “prepare for immediate repatriation.” Joy claims that she
clause “or for three months for every year of the unexpired was told that from June 26 to July 14, 1997, she only earned
term, whichever is less” in the 5th paragraph of Section 10 a total of NT$9,000.15 According to her,
of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL; Wacoal deductedNT$3,000 to cover her plane ticket to
and the December 8, 2004 Decision and April 1, 2005 Manila.
Resolution of the Court of Appeals are MODIFIED to the
effect that petitioner is AWARDED his salaries for the entire On October 15, 1997, Joy filed a complaint
unexpired portion of his employment contract consisting of for illegal dismissal with the NLRC against petitioner and
Wacoal. LA dismissed the complaint. NLRC reversed LA’s
decision. CA affirmed the ruling of the National Labor Ruling on the constitutional issue
Relations Commission finding respondent illegally dismissed
and awarding her three months’ worth of salary, the In the hierarchy of laws, the Constitution is
reimbursement of the cost of her repatriation, and supreme. No branch or office of the government may
attorney’s fees exercise its powers in any manner inconsistent with the
Constitution, regardless of the existence of any law that
ISSUE: supports such exercise. The Constitution cannot be
trumped by any other law. All laws must be read in light of
Whether or not Cabiles was entitled to the unexpired the Constitution. Any law that is inconsistent with it is a nullity.
portion of her salary due to illegal dismissal.
Thus, when a law or a provision of law is null
HELD: because it is inconsistent with the Constitution, the nullity
cannot be cured by reincorporation or reenactment of the
YES. The Court held that the award of the three-month same or a similar law or provision. A law or provision of law
equivalent of respondent’s salary should be increased to that was already declared unconstitutional remains as such
the amount equivalent to the unexpired term of the unless circumstances have so changed as to warrant a
employment contract. reverse conclusion.

In Serrano v. Gallant Maritime Services, Inc. and Marlow The Court observed that the reinstated clause, this
Navigation Co., Inc., this court ruled that the clause “or for time as provided in Republic Act. No. 10022, violates the
three (3) months for every year of the unexpired term, constitutional rights to equal protection and due process.96
whichever is less” is unconstitutional for violating the equal Petitioner as well as the Solicitor General have failed to
protection clause and substantive due process. show any compelling change in the circumstances that
would warrant us to revisit the precedent.
A statute or provision which was declared unconstitutional
is not a law. It “confers no rights; it imposes no duties; The Court declared, once again, the clause, “or
it affords no protection; it creates no office; it is inoperative for three (3) months for every year of the unexpired term,
as if it has not been passed at all.” whichever is less” in Section 7 of Republic Act No. 10022
amending Section 10 of Republic Act No. 8042 is declared
The Court said that they are aware that the clause “or for unconstitutional and, therefore, null and void.
three (3) months for every year of the unexpired term,
whichever is less” was reinstated in Republic Act No. 8042
upon promulgation of Republic Act No. 10022 in 2010.
Manila Prince Hotel vs GSIS 1. Whether or not Sec. 10, second par., Art. XII, of the
1987 Constitution is a self-executing provision.
Facts:
2. Whether or not the Manila Hotel forms part of the
The controversy arose when respondent Government national patrimony.
Service Insurance System (GSIS), pursuant to the 3. Whether or not the submission of matching bid is
privatization program of the Philippine Government, premature
decided to sell through public bidding 30% to 51% of the 4. Whether or not there was grave abuse of discretion
issued and outstanding shares of respondent Manila Hotel on the part of the respondents in refusing the
Corporation (MHC). The winning bidder, or the eventual matching bid of the petitioner.
“strategic partner,” will provide management expertise or
Rulings:
an international marketing/reservation system, and
financial support to strengthen the profitability and In the resolution of the case, the Court held that:
performance of the Manila Hotel.
It is a self-executing provision.

Since the Constitution is the fundamental, paramount and

In a close bidding held on 18 September 1995 only two (2) supreme law of the nation, it is deemed written in every
bidders participated: petitioner Manila Prince Hotel statute and contract. A provision which lays down a
Corporation, a Filipino corporation, which offered to buy general principle, such as those found in Art. II of the 1987
51% of the MHC or 15,300,000 shares at P41.58 per share, Constitution, is usually not self-executing. But a provision
and Renong Berhad, a Malaysian firm, with ITT-Sheraton as which is complete in itself and becomes operative without
its hotel operator, which bid for the same number of shares the aid of supplementary or enabling legislation, or that
at P44.00 per share, or P2.42 more than the bid of petitioner. which supplies sufficient rule by means of which the right it
Prior to the declaration of Renong Berhard as the winning grants may be enjoyed or protected, is self-executing.
bidder, petitioner Manila Prince Hotel matched the bid
A constitutional provision is self-executing if the nature and
price and sent a manager’s check as bid security, which
extent of the right conferred and the liability imposed are
GSIS refused to accept.
fixed by the constitution itself, so that they can be
determined by an examination and construction of its
terms, and there is no language indicating that the subject
Apprehensive that GSIS has disregarded the tender of the
is referred to the legislature for action. Unless it is expressly
matching bid and that the sale may be consummated with
provided that a legislative act is necessary to enforce a
Renong Berhad, petitioner filed a petition before the Court.
constitutional mandate, the presumption now is that all
provisions of the constitution are self-executing. If the
constitutional provisions are treated as requiring legislation
Issues:
instead of self-executing, the legislature would have the was restrictively an American hotel when it first opened in
power to ignore and practically nullify the mandate of the 1912, a concourse for the elite, it has since then become
fundamental law. the venue of various significant events which have shaped
Philippine history.
10, second par., Art. XII of the 1987 Constitution is a
mandatory, positive command which is complete in itself Verily, Manila Hotel has become part of our national
and which needs no further guidelines or implementing economy and patrimony. For sure, 51% of the equity of the
laws or rules for its enforcement. From its very words the MHC comes within the purview of the constitutional shelter
provision does not require any legislation to put it in for it comprises the majority and controlling stock, so that
operation. It is per se judicially enforceable. When our anyone who acquires or owns the 51% will have actual
Constitution mandates that in the grant of rights, privileges, control and management of the hotel. In this instance, 51%
and concessions covering national economy and of the MHC cannot be disassociated from the hotel and the
patrimony, the State shall give preference to qualified land on which the hotel edifice stands.
Filipinos, it means just that – qualified Filipinos shall be
It is not premature.
preferred. And when our Constitution declares that a right
exists in certain specified circumstances an action may be In the instant case, where a foreign firm submits the highest
maintained to enforce such right notwithstanding the bid in a public bidding concerning the grant of rights,
absence of any legislation on the subject; consequently, if privileges and concessions covering the national economy
there is no statute especially enacted to enforce such and patrimony, thereby exceeding the bid of a Filipino,
constitutional right, such right enforces itself by its own there is no question that the Filipino will have to be allowed
inherent potency and puissance, and from which all to match the bid of the foreign entity. And if the Filipino
legislations must take their bearings. Where there is a right matches the bid of a foreign firm the award should go to
there is a remedy. Ubi jus ibi remedium. the Filipino. It must be so if the Court is to give life and
meaning to the Filipino First Policy provision of the 1987
The Court agree.
Constitution. For, while this may neither be expressly stated
In its plain and ordinary meaning, the term patrimony nor contemplated in the bidding rules, the constitutional fiat
pertains to heritage. When the Constitution speaks of is omnipresent to be simply disregarded. To ignore it would
national patrimony, it refers not only to the natural resources be to sanction a perilous skirting of the basic law.
of the Philippines, as the Constitution could have very well
The Court does not discount the apprehension that this
used the term natural resources, but also to the cultural
policy may discourage foreign investors. But the
heritage of the Filipinos.
Constitution and laws of the Philippines are understood to
It also refers to Filipino’s intelligence in arts, sciences and be always open to public scrutiny. These are given factors
letters. In the present case, Manila Hotel has become a which investors must consider when venturing into business
landmark, a living testimonial of Philippine heritage. While it in a foreign jurisdiction. Any person therefore desiring to do
business in the Philippines or with any of its agencies or PRIVATIZATION and OFFICE OF THE GOVERNMENT
instrumentalities is presumed to know his rights and CORPORATE COUNSEL are directed to CEASE and DESIST
obligations under the Constitution and the laws of the from selling 51% of the shares of the Manila Hotel
forum. Corporation to RENONG BERHAD, and to ACCEPT the
matching bid of petitioner MANILA PRINCE HOTEL
There was grave abuse of discretion.
CORPORATION to purchase the subject 51% of the shares
To insist on selling the Manila Hotel to foreigners when there of the Manila Hotel Corporation at P44.00 per share and
is a Filipino group willing to match the bid of the foreign thereafter to execute the necessary agreements and
group is to insist that government be treated as any other documents to effect the sale, to issue the necessary
ordinary market player, and bound by its mistakes or gross clearances and to do such other acts and deeds as may
errors of judgement, regardless of the consequences to the be necessary for the purpose.
Filipino people. The miscomprehension of the Constitution is
regrettable. Thus, the Court would rather remedy the
indiscretion while there is still an opportunity to do so than TAWANG MULTI-PURPOSE COOPERATIVE v. LA TRINIDAD
let the government develop the habit of forgetting that the WATER DISTRICT
Constitution lays down the basic conditions and
G.R. No. 166471, March 22, 2011
parameters for its actions.

Since petitioner has already matched the bid price

tendered by Renong Berhad pursuant to the bidding rules, FACTS:
respondent GSIS is left with no alternative but to award to
Petitioner Tawang Multi-Purpose Cooperative (TMPC) was
petitioner the block of shares of MHC and to execute the
organized to provide domestic water services in Brgy.
necessary agreements and documents to effect the sale in
Twang, La Trinidad, Benguet. Respondent La Trinidad Water
accordance not only with the bidding guidelines and
District (LTWD) is a government owned and controlled
procedures but with the Constitution as well. The refusal of
corporation, a local water utility created under PD No. 198,
respondent GSIS to execute the corresponding documents
authorized to supply water for domestic, industrial and
with petitioner as provided in the bidding rules after the
commercial purpose within municipality of La Trinidad,
latter has matched the bid of the Malaysian firm clearly
Benguet.
constitutes grave abuse of discretion.
October 9, 2000, TMPC filed with National Water Resources
Board an application for Certificate of Public Convenience
(CPC) to operate and maintain a waterworks system in
Brgy. Tawang LTWD claimed that under Sec. 47 of PD No.
Hence, respondents GOVERNMENT SERVICE INSURANCE
198, as amended, its franchise is exclusive.
SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON
August 15, 2002, the NWRB held that LTWD’s franchise Constitution. And the rule is that in case of conflict between
cannot be exclusive since exclusive franchises are the Constitution and a statute, the former prevails, because
unconstitutional under Sec. 2, Art. XII. the constitution is the basic law to which all other laws must
conform to.
October 1, 2004, upon appeal of LTWD to the RTC, the latter
cancelled TMPC’s CPC and held that Sec. 47 of PD No. 198
is valid; that the ultimate purpose of the Constitution is for
the State, through its authorized agencies or
instrumentalities, to be able to keep and maintain ultimate
control and supervision over the operation of public utilities.
What is repugnant to the Constitution is a grant of franchise
exclusive in character so as to preclude the State itself from
granting a franchise to any other person or entity than the
present grantee when public interest so requires.

November 6, 2004, RTC denied the motion for

reconsideration filed by TMPC.

ISSUE:
Whether RTC erred in holding that Sec. 47 of PD No. 198 is
valid
HELD:

Yes, the Supreme Court ruled in favor of petitioner. Quando

aliquid prohibetur ex directo, prohibetur et per obliquum –
Those that cannot be done directly cannot be done
indirectly. Under Sec. 2 and 11, Art. XII of the 1987
Constitution, The President, Congress, and Court cannot
create indirectly franchises that are exclusive in character
by allowing the Board of Directors (BOD) of a water district
and Local Water Utilities Administration (LWUA) to create
franchises that are exclusive in character. Sec. 47 of PD no.
198 is in conflict with the above-mentioned provision of the